Dynamic Planner has expanded its fund risk profiling service to include investment trusts. Broadening the range of investment vehicles analysed by Dynamic Planner, the first trust to be risk profiled is the Seneca Global Income & Growth Trust plc, assigned a Dynamic Planner Risk Profile 7 (on a 1-10 scale).

To date, Dynamic Planner risk profiles more than 1400 model portfolios and open-ended funds and plans to increase the number of investment trusts analysed. Financial advisers will then be able to apply the same approach to assessing the suitability of different solutions – whether an OEIC or investment trust.

Dynamic Planner Proposition Director Chris Jones said: “Trusts are the vehicle of choice for many investors and while choice is all important, we believe it’s vital to maintain a consistency of approach when assessing suitable investment solutions.

“For more than 17 years, we have helped thousands of advisers understand the risk profile of thousands of model portfolios and open-ended funds. We can apply this same model to assess the risk profile of investment trusts, because we analyse all risk characteristics of underlying holdings.”

Chris continued: “We are delighted to welcome the Seneca Global Income & Growth Trust plc to Dynamic Planner. We have conducted in-depth analysis of the underlying holdings of the Trust, looking back over several months. By utilising our in-house research, which now spans over 25,000 individual securities, we calibrated the Trust’s holdings to our latest capital market assumptions, enabling us to assess its expected volatility journey.

“This process includes the evaluation of gearing on individual holdings and this was also carefully considered at the wrapper level for the Seneca Global Income & Growth Trust plc.”

David Thomas is Chief Executive of Seneca Investment Managers Ltd and the Trust’s investment manager.

He said: “We were keen to have this analysis undertaken, since Dynamic Planner has provided formal risk profiling oversight of our similar open-ended multi-asset funds for a number of years. We are very comfortable with their rigorous process and saw no reason to exclude the Trust, just because it was closed-ended, given its inherent multi-asset diversification and the tight Board control over the level of gearing applied to the underlying assets.”

Nick Britton – Head of Intermediary Communications at the AIC [The Association of Investment Companies] – said: “As part of our ongoing education programme, we’ve trained thousands of financial advisers about investment trusts and we’re keen to break down barriers to their wider use wherever possible.

“One of these barriers has been the lack of availability of risk profiling for investment trusts, which many advisers have told us is essential to their research process. This news from Dynamic Planner is an encouraging sign that one more barrier to investment trust use is on the way to being removed, smoothing the path to wider adoption of trusts among advisers.”

Find out more about Dynamic Planner fund research

Looking back over the first half of the year, January seems to be a completely different era. In between, an unprecedented health crisis has uprooted medical care, financial markets and the prospects for the global economy. In spite of the sharp rebound in markets, allocators are still reeling from the vehemence of the sell-off.

As economic numbers are now released, the severity of the downturn becomes slowly apparent, with further contractions expected for the rest of the year. Repeat lockdowns and voluntary social distancing, as well as uncertainty around re-opening, continues to negatively impact economic activity. Consumer confidence remains the priority for the post-lockdown world.

While unemployment has been kept in check with financial support from governments, as these policies stand to run off, as surely they will, uncertainty about jobs could delay consumption, leading to further decline in activity and a vicious cycle of defaults and further unemployment. These could possibly freeze up financial conditions, exposing vulnerabilities of already over-indebted households and corporates.

Though we have witnessed a sharp rebound in risk assets, we do wonder whether the market is pricing in a quicker recovery than what the ground reality is telling us. Analysis shows that the S&P 500 Index and Consumer Confidence has historically trended together, but recently there has been a decoupling, with a parting of ways for the two.

S&P 500 / Consumer confidence

As we look forward, what started feeling like a macro shock has slowly started to morph into a macro regime change. Government borrowing across the developed economies have reached eye watering levels, the proceeds being used to buying back government and for the first time, corporate debt, both investment grade and high yield.

Corporates themselves are going through an identity crisis, with business models and profitability coming under pressure from changing consumer preferences. Usage in public transport and workplaces have been way below baseline, with residential numbers higher than baseline in spite of re-opening. Thus, sectors like retail, energy and commercial property come under pressure.

Google UK mobility data

Even as business activity restarts, heightened health and safety concerns will continue to slow progress. It is likely that the recession we are in will be long and drawn out. Thus, with this context in mind, valuations of equities and fixed income, especially credit, appear to be stretched.

If markets were being irrational before the crisis, it looks to continue being irrational for some time to come. In fact, John Maynard Keynes’ pithy comment comes immediately to mind, ‘The markets can remain irrational longer than you can remain solvent’. In times like these, portfolio risk comes to the fore for our allocations and client solutions.

To achieve investment goals and meet the needs of clients, we need to stay invested, as the alternative would be inherently unproductive. Without risk, we would not have a return. Thus, we need to focus on putting together a portfolio of ‘desirable’ risks – risks which can be mitigated if the need arises, like the risk arising out of investments like equities and fixed income.

Risks like liquidity are the undesirable ones as there is nothing one can do if no one wants to buy illiquid holdings. Focusing on risk in this way helps us achieve our objectives, while keeping our powder dry to take opportunities as and when they arise, which they certainly will.

Clients in decumulation – What is the best defence against market volatility?

[vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid” bg_image_animation=”none”][vc_column_text]Whether you feel good, bad or indifferent about it – video chat on platforms like Zoom very quickly became synonymous with wider events this year.

Media advertising soon caught up and the distinctive images were everywhere. That trend has inevitably crossed over into professional walks of life, including of course financial services.

Indeed, four in 10 industry professionals say they are now using video chat to help conduct new business at their firm. The finding is part of a June 2020 survey we conducted of a cross-section of Dynamic Planner users, responding to questions concerning new business they had conducted – with new and with existing clients – in four months from February to May this year.

Video chat was one of two key ways firms engaged with clients, in a first meeting for new business, with 40% revealing they used it. Respondents added that clients were comfortable with the platform, through using it socially in lockdown and said that the time savings professionally, through not having to travel to client homes for meetings, were huge.

One person wrote:

“Video conferencing has meant we can speak with a client in Belfast, Devon and Essex in the same day. Face-to-face would have taken a week.”

The most popular way to host a first meeting with clients this year, at 44%, was a telephone conversation, while 10% said they used email. Prior to a meeting, just over half, 51%, said telephone was how they initially communicated with a client – with a quarter, 25%, using email and 17% employing video chat in that scenario.

In an interview in late-March, Lee Whiteside, an adviser in the North West, revealed he first started using Zoom – in combination with Dynamic Planner – this year once lockdown began.

He said of the platform:

“You can share documents with the client and do pretty much everything you can face-to-face… and at the point of sale. It’s actually easier, in one way and a really good of working. You do start to think, ‘Why don’t I run my business like this all the time?’”

David Owen, of Lifetime Connect in Hertfordshire, commented in April:

“Hopefully, some advisers will embrace this change and carry on holding client meetings remotely in future. And once we start to get up to speed and move away from things like wet signatures, for example, we can be in a position to work more effectively.”

June’s survey of Dynamic Planner users ran to 21 questions and covered multiple issues around new business for firms.

Concerning barriers to new business, 42% answered that they were already running at capacity at their firm, while 20%, one in five, said they did not have time to pursue new business. 22% added that opportunities for new business were simply not there and 12% said they could not recruit enough people to meet the demand.

Compared to Q4 2019, the survey questioned, ‘How is your level of new business in 2020?’ 46%, nearly half, said their level of new business was lower, while a third, 33%, said it was the same and just over a fifth, 21%, said it had been higher this year.

Time, or a lack of it – despite us being more time-rich in many ways, working from home in lockdown – was a recurring issue.

The survey asked, ‘How much time does your new business process take, from initial contact to completion?’ Less than 3% said it was faster this year, while 38% revealed it was slower and 60% said it was the same. When asked to elaborate, ‘Why?’, respondents described delays with post and providers; collaboration among colleagues, hampered by people working in isolation remotely; and a lack of support from admin team members, who had been furloughed.

‘Why were clients and prospects getting in touch?’ Understandably, the top reason at 23% was market volatility, followed on 19% by a desire to get finances and life in order – and on 18% by income in retirement. 14% said that lockdown had given them time to really look at their finances, while 10% said lockdown had made them re-evaluate and had triggered their inquiry.

Lee Whiteside continued in March:

“Clients, of course, are worried at the moment. We’re seeing pretty significant losses, even in quite low risk portfolios. There’s no point avoiding client phone calls. It’s about reiterating messages and revisiting client objectives. It’s a reassurance piece as much as anything.”

Nick Ryan, with Yellow Bear Financial Consultancy in Buckinghamshire, said earlier this year:

“Of course, I’m not happy about the situation as their adviser and they’re not happy as clients. But I am pleased with how people have reacted – I don’t think I actually could have asked for a better reaction. Hopefully, that was down to the preparation work we have together done in readiness for this type of market fall-off.”

David Owen added of the crisis’ impact:

“Rather than disrupted, I would say it has actually enabled us as a business. We’ve not hit the pause button, we’ve carried on – just with a different rhythm and routine.”

What did our survey reveal? ‘10 learnings from advice firms successfully generating new business in the pandemic’. Download your copy of our guide here.[/vc_column_text][/vc_column][/vc_row]

By Sam Liddle, Sales Director, Church House Investment Management

If you’re a young person, with no job and little prospects, then Rishi Sunak’s recent jobs announcement would have given you cause for hope for the future. But it was less positive for committed savers, with retirement on the horizon, and recent retirees wondering what income to draw from a ravaged portfolio.

If anything, the Chancellor’s summer statement was notable for not axing the triple lock that supports rising state pension payments. What’s more, the demographic picture is getting less helpful, as populations grow older.

The latest EU projections say that by 2100 there’ll be less than two working people to fund every retiree. That’s a far cry from the current three workers to one retiree. Given that 2020’s markets have been unhelpful to those near or in retirement, now is probably a helpful time to offer the reminder that income can be generated from a bottomed-out market.

Readers will no doubt be aware of the risk / reward dynamic. In bull markets, investment strategies pile into risk assets to capture these market gains. And this works very well. Until it doesn’t. As all-too-many retirees find, risk assets can quickly turn into huge liabilities.

This is something we saw almost universally when Covid-19 drove economies into lockdown and stopped history’s longest bull market in its tracks earlier this year. Stock markets were decimated, unemployment rates soared, and central bank support once again slipped into unprecedented territory. Value was wiped from almost every investment strategy, but those with the highest risk allocations were left the worst-affected.

For younger investors, investments are not typically their primary source of income, and they have time on their side. The same cannot usually be said for retirees who rely (or plan to rely) almost entirely on their investments for income – and this need doesn’t disappear just because markets are crashing.

Unfortunately, this can give rise to a well-known and potentially serious issue called ‘sequencing risk’ – also known more colloquially as ‘pound-cost ravaging’. For retirees wanting to draw income from their portfolio in falling markets can leave capital depleted and, in turn, future income permanently lower.

After all, while a 10% loss in any one year would require an 11% gain to break even, a 30% loss requires a rise of 43% to break even. Relatively short-term losses can have a lasting impact, and drawdowns only emphasise this.

The result? Either those affected ultimately accept a reduced level of income, or their pension pot will deplete further and further until a return to its initial value becomes virtually impossible to achieve. Put another way – it is the effect of compound interest in reverse.

With Covid-19 wiping hundreds of billions off pension pots across the UK, pound cost ravaging is a harsh reality that many will now be facing. So, how can retirees minimise the long-term impact of wider market performance?

To start, the investment performance of a fund relative to another should take a back seat. After all, funds posting large gains could indicate a higher proportion of holdings in risk assets and equally huge losses could follow when markets turn against them. Instead, a much more important consideration is whether the product can provide for their retirement goals consistently.

This will almost always involve providing income and preserving capital as much as possible in all market conditions. This is where multi-asset and, more specifically, absolute return funds come to the fore.

They have often been misunderstood with investors relying on performance tables to determine their investment strategy. However, the very nature of well-managed absolute return is to smooth returns and limit losses rather than ride the rollercoaster at the mercy of single asset movements.

With careful investment across asset classes, it is possible to target a 3% to 4% annual income drawdown with capital remaining largely intact over the longer term and with the income growing in line with inflation.

It also helps to have a clear focus when managing these funds. Do the fund managers themselves invest in their own strategies? Do their families? For example, our own fund, the Church House Tenax Absolute Return Strategies fund was launched in 2007 borne out of a single client’s priority to protect the value of his capital and take a consistent income. They’re still invested today. As are the fund’s managers.

This is a really effective stabiliser as just about every decision made on the fund is made through the lens of this investor and that of our families and own retirement pots. Prevailing market conditions have exposed many investment funds and, in so doing, have sadly had a devastating effect on retirement pots. We must start to learn from these times. By keeping volatility to a minimum throughout market cycles, a much greater emphasis can be placed on overall capital preservation relative to peer funds that sacrifice ultra-low risk for a shot at greater returns.

Of course, well-run multi-asset absolute return funds tend not to participate in the entirety of the upside when wider markets are booming, but that doesn’t matter. When the tide changes, their ongoing provision of ‘cash plus’ returns and capital preservation (or at least minimal losses relative to the markets in which they invest) will look a whole lot more appealing to a retirement investor than a blown-out account.

Building a retirement pot should be a marathon not a sprint.

Find out more about Dynamic Planner Risk Managed Decumulation funds – designed for your clients making regular withdrawals, typically in retirement

We have all been grateful for a little help at some point this year. Whether it has been an understanding boss, or a driver delivering your weekly food shop – it has been very welcome.

We have also been happy to help others and it has felt good to give back, even in only a small way, when we have had the chance.

At Dynamic Planner, we have heard stories of advisers and firms extending that spirit and sense of community to clients – speaking to them at the start to lockdown, so that they can hear a friendly voice; or helping them get their head around Zoom, so that they can ‘meet’ with friends and family.

We spoke to people from 10 different advice firms this year, who have all adopted Dynamic Planner within their financial planning process and we asked them, ‘How has its technology helped you most this year?’ Below, is what they said.

1. Financial plan with your clients in real-time

“I started using Dynamic Planner’s Client Review at the start of 2020 and it has changed everything for me. It’s just brilliant. It makes my life so much easier, because now I can sit and go through everything with the client in real time, whereas before I was having to give my paraplanners so much paper work after a meeting for them to input.

“I now sit with the client and say, ‘This is where you are now. This is what your portfolio was worth a year ago. This is what you’ve done in the last 12 months. And this is what it’s worth today’. We can recheck their attitude to risk and the whole process becomes much more interactive.”

Louise Jones, Ivor Jones & Co

“The great thing about Dynamic Planner is it’s very easy to screenshare; it’s very easy to navigate; you can’t really go wrong; and the Client Review report – you can’t really undersell it. It allows advisers to articulate to clients their value, in a stylish way that appears like it has been completed by a team of 10 people, who worked for hours to create it.

“To be able to create a presentable report for a client, in a relatively short period of time; to share it with them via your screen; then to give the client the context and financial planning tips is brilliant.”

David Owen, Lifetime Connect

2. Improve your clients’ understanding of risk within their portfolio

“At the end of the day, everybody knows their investments are going to go up and that they are going to go down. But what is key is that it is communicated in a manner and in language that the client clearly understands. As an adviser, it is my job to do that and that’s what Dynamic Planner’s Client Review report allows us to do.”

Neil Gilbourne, 3R Financial Services

“It is up to the adviser to explain risk – because there is risk in everything the client does. Even in an old-fashioned risk profile 1, ‘Under the bed’ there is the risk of theft and of inflation. That is where Dynamic Planner helps us so much, in pictures and words, to explain that.”

Kevin Walsh, Home & Finance Ltd

“Where Dynamic Planner has been brilliant this year is if you are rebalancing a portfolio for a client. You can show them where their portfolio or where a fund sits on the ‘Efficient frontier’, in relation to the risk and return of the benchmark asset allocation for each risk profile. That can be a really important visual for a client.”

Serena van der Meulen, Van der Meulen Associates

3. Enable your clients to complete risk questionnaires on their own remotely

“Dynamic Planner has helped even more during lockdown this year. We’ve been able to send clients a link to complete their attitude to risk, prior to a meeting and people have had time on their hands, so they have been getting on with it. I sent one link out and it came back within five minutes.”

Susan Hill, Susan Hill Financial Planning

“That completely changes the conversation and allows you to go to that meeting with a risk profile report and talk it through with the client and ask them, ‘Are you comfortable with that level of risk?’

“It brings the whole conversation alive and makes it feel more real for the client, because they can see with their investments at a risk level, ‘Plan for this’, ‘Be prepared for this’ and ‘Be pleasantly surprised by this’. The client can see, ‘Okay, I’ve got £100,000. How is that going to perform at a risk profile 7, or a risk profile 4?’ It’s been really good.”

Jack Igglesden, Radcliffe & Co

4. Enable easy collaboration among colleagues and teams

“Using Dynamic Planner, advisers can complete reviews themselves or ask for help from Admin – who, in that instance, can produce the main part of the report before an adviser amends, where necessary.

“Working in that framework makes the process easier and, from a compliance perspective, we know reviews are covering everything necessary. It stops us having 11 different processes for 11 different advisers, which is difficult to monitor.

“Introducing change always has its challenges and if you try to introduce too much, you can get less buy-in. At any firm, you will always get early adopters of something new and others who will follow at the end. But once you have introduced change and people become used to a new process, it no longer becomes an issue. Dynamic Planner is easy to use and it doesn’t require a huge amount of training, because it is so user friendly.”

Clare Edes, Skerritts Chartered Financial Planners

5. Increase your firm’s capacity to service more clients

“I completed a review for a client the other day in about 20 minutes. Obviously, nothing much was required – and if a review is more complex, it will of course need more time. But what Dynamic Planner has allowed me to do is review around 100 to 120 clients each year and have greater capacity, definitely. The report itself is nicely presented; it keeps MiFID happy; and it’s extremely quick to produce.”

Nick Ryan, Yellow Bear Financial Consultancy

6. Match your clients with suitable investment portfolios

“It is about reassuring clients that they remain on the right track, with regards to risk and if there are changes to how much risk they want to take in future, we can use Dynamic Planner to map where they are now and where they need to be in future.”

Lee Waters, Barwells Wealth

If you are not already a Dynamic Planner user – and would like to find out more about how we can help you and your firm – please get in touch.

The pandemic this year has impacted different sections of society in different ways. An example: research by Legal & General highlighted that 1.5m people could now delay retirement because of Covid-19 and its financial impacts.

This year’s subsequent lockdown, demanding people spend extended time at home than they might otherwise, has further caused many to re-evaluate their priorities in life. According to further research by Canvas8, many of us are reassessing the importance of work and professional life in comparison to personal relationships. As a result, if people can retire earlier in future, perhaps they are now more likely to do so.

The need today for engaging and expert financial planning and advice, in this changing environment, is arguably greater than ever. In complex and stressful times, where the future really is not known, planners have a pivotal role to play – listening carefully to their clients, empathising and trying to help them understand their priorities and options now.

Going back to basics – perhaps on a video call and asking core planning questions, such as those from American-based thought leader George Kinder – could well illicit answers very different to those given by clients six months ago. For example:

1. ‘What does money mean to you?’
2. ‘If you were financially secure – how would you live your life? What would you do with money?’
3. ‘If you only had a few years to live, would you change your life? How?’

In a socially distanced world, the answers to these questions and building a subsequent financial plan and offering regulated advice raises new demands of firms’ previous processes. There are three key considerations, I would venture, now needed in this new normal:

1. Financial advisers are increasingly adopting a single system covering the entire planning process and integrated with their back office and platforms they use. Why? First, it saves time and also removes more room for human error associated with re-keying information. It also means that firms are embracing and adopting a consistent and single definition of risk throughout their client proposition, mitigating what the FCA has termed the risk of ‘mis-calibration’ between the adoption of different planning tools and technology.
2. Financial planning technology comes into its own when it enables advice firms to build and plan dynamically, in real time, with their clients. Not only is this faster than more traditional processes, it frees up advisers to do what they do best: know the client and shape recommendations accordingly. All the while, technology does what it is best at – automating often complex analysis. Many firms using financial planning technology to complete annual client reviews over Zoom, for example, have reported being able to shift from three to four meetings a week, to three to four meetings a day. A huge change.
3. The presentation of information to clients must be fair, clear and not misleading. This becomes even more vital when technology is used via video chat. The field of behavioural finance is rapidly offering significant insights into how clients are likely to behave, based on their personality, situation and information they are given. The best technology will incorporate such insight into outputs.

What does this all mean? In short, financial planning today is even more valuable as a result of the coronavirus pandemic. Adopting technology which helps advisers objectively create plans in real time, offers not only transformational productivity benefits, but the ability to support good outcomes for many more clients at a time when they need it most.

If you are not already a Dynamic Planner user – and would like to find out more about how we can help you and your firm – please get in touch.

By Louis Williams, Dynamic Planner Head of Psychology and Behavioural Insights

This year’s coronavirus crisis has impacted the adviser-client relationship in such a way that online communication is now essential.

Advice firms face the question of whether this mushrooming trend will impact the levels of trust their clients have in the advice they receive long-term – and ultimately their decision to work with a professional financial adviser.

For many firms, the sharp transition from March 2020 to online communication platforms has not been a huge challenge due to technology and solutions being widely available and easily accessed. However, if not handled carefully and appropriately, the subsequent separation experienced, between firms and their clients, has the potential to negatively impact relationships and their value on a personal and on a business level – for example, client referrals for new business.

That said, some online communication platforms may not be so accessible for some older clients. Furthermore, such communication, in comparison to face-to-face contact, disrupts the way advisers have classically and skilfully engaged with clients in the past.

Clients’ learning styles can differ. For example, many may prefer visual aids, which can lose their impact virtually or simply be difficult to navigate and share using video chat, for instance and even more so without the use of video.

Clients’ preferences are, of course, important to consider as they naturally look to their adviser for guidance on matters they themselves do not fully understand. After all, they are of course paying advice firms for their expertise and experience in these areas.

Existing data and research here suggests that the majority of people – 64% or nearly two-thirds – have multiple preferences for the way they best learn, i.e. visually and verbally, while inclinations for a single preference increase with age. This, of course, is relevant here as clients of firms tend to be older, underlining the importance of employing online communication effectively.

Video chat – Pros and cons

Many advice firms today have naturally turned to video chat to communicate with their clients. However, building rapport using it can be more challenging due to difficulties interpreting non-verbal communication and making and maintaining eye contact is not as simple as when face-to-face.

Such factors can together erode levels of trust in the adviser-client relationship. Advisers may, of course, then feel less confident that they fully understand a client, who in turn is less confident of the information and advice they are receiving.

To develop trust, regular communication and also maintaining communication over a sustained period is required – but, as we have seen, building rapport is not as simple remotely. Research has shown that remote forms of communication can lead to the development of similar levels of trust as face-to-face. However, evidence must also be considered that it takes longer for trust to grow and in this sense is more fragile and less robust than trust built through face-to-face contact.

Furthermore, research demonstrates that while face-to-face communication is more important with a new client initially – further engagement, using, for example, video chat, can prove as effective once a relationship has been established.

In any relationship, an ability to effectively empathise with someone and be able to provide and display compassionate support is essential.

Those who do so are perceived to be more trustworthy – and clients of firms are naturally more likely to heed advice from people they like and who are empathetic to their situation and circumstances, rather than mere experts in the field. Trust based on emotion, in this context, is arguably most significant.

What is the answer?

How then can advisers maintain or build relationships and trust with clients if there are either no opportunities to meet or only limited ways to meet, as has been the case in 2020? In answer, there happily are approaches firms can adopt, particularly with older clients.

Arranging regular calls to enquire about a client’s health, physically and mentally, is an important step a firm can take. Discussing both financial and non-financial matters is essential during times like we have experienced this year and can prove beneficial to the client’s overall wellbeing, emotionally and financially.

Trust issues were leading factors behind decisions, either positively or negatively, to seek professional financial advice before Covid-19.

Naturally, it is now more vital than ever that advisers maintain an active and authentic presence online and be just as accessible as they were before lockdown began in March.

Following conversations anecdotally this year with advisers, it is clear that they are aiming to get to know their clients personally to understand their financial needs, desires and overall wellbeing today. It is important that those clients are still able to experience and access real care and attention from firms in this new era we have all entered, whether we have liked it or not, in 2020.

“Older clients might prefer face-to-face and to look into the whites of your eyes” – How one adviser has managed their relationships with clients this year

By Product Manager Josh Knight

When we first released the review process last summer, we spent a lot of time thinking (and testing) how to ensure it was easy to use. Hopefully, you can tell.

We know from talking to users though that there are always times when a little help and gentle pointing in the right direction is appreciated. And, do remember, our Client Success team are always on hand should you require assistance. Indeed, they have remained on the other end of the phone for support throughout lockdown this year.

This month, we’re excited to announce a new feature for Dynamic Planner, to help you get up and running, in the shape of a new ‘Help’ menu. In it, you can find a number of resources to support you:

• Contact details for Client Success – we don’t want it to be hard for you to get in touch
• A link to our Content Hub
• Help and FAQs
• Our feedback portal – your feedback is important and helps guide future developments within Dynamic Planner

On many pages, you’ll also see a tutorial video – either for the process you’re in, or in most cases for the specific screen you’re on.

So, if you ever get stuck or wonder what a particular feature is for, check out the new help menu and watch the videos. And don’t worry – as we said – we’re still at the end of the phone should you ever need any further help. Thank you!

Aegon [previously Cofunds] valuations integration update

Dynamic Planner’s June release, on Thursday 25 June, implemented a new change to support the release of Aegon’s new security protocols. The required credentials have changed to the agency number and a One Time Passcode (OTP) generated from the Aegon website.

The original valuations integration credentials, previously entered, are no longer supported, so a new set of credentials need to be entered, to continue with the service. To obtain the OTP, you will need to follow the steps below with Aegon before doing anything else in Dynamic Planner:

1. A firm administrator with ‘Bulk Data admin’ access needs to login to the Aegon platform
2. Select ‘Reports’ dropdown. Then select ‘Manage bulk data file integration’
3. Select ‘Integration’ – then ‘Set up new system’
4. You will be presented with a dropdown menu where you need to select the back-office provider you are using, along with the organisation you are looking to generate a data feed for
5. Choose the files you wish to start generating for your data feed
6. To complete integration setup, generate a token to enter back in Dynamic Planner
7. Back in Dynamic Planner, click on the Aegon [previously Cofunds] tab on the home page under ‘Your platform credentials’, as below

8. Enter the required information as requested, below. Note, both the OTP and the Organisation ID are numeric formats

If you require any further information or encounter any other issues, please contact our client support team on 0333 6000 500, selecting option 1. Alternatively, contact your Dynamic Planner Account Manager who can guide you through this. Thank you.

[vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid” bg_image_animation=”none”][vc_column_text]As we try and shed our feelings of embattlement, with lockdown finally easing across most of the UK, the macro environment is radically different from the one which faced us when we entered lockdown in March, writes Abhi Chatterjee, Dynamic Planner Chief Investment Strategist.

Today, we are faced with an economy which is re-starting – with all its screeches and grinding gears – helped by the lubrication and deluge of ‘helicopter’ money, be it in terms of cheques to individuals or furlough schemes and loans to corporations. Here in the UK, this has been called the ‘Bounce Back Loan Scheme’ or BBLS.

The current situation has both similarities and dissimilarities with the last global financial crisis of 2008. Like then, governments and central banks across the planet reacted promptly in a coordinated manner to bolster the economy and put forward the balance sheets of central banks.

The difference now in 2020 is that 12 years ago it was just one sector – the financial sector – which had to be bailed out. This time it is all sectors across the board, apart from a few, that need bailing out.

Economics 101 says that with an increase in money supply to a system, ceteris paribus, all things being equal, inflation should increase.

Post-2008, when the money taps were opened by the central banks, threats of inflation came to the forefront. However, while we waited and waited, the inflation that was predicted never arrived. The debate regarding the why and wherefores rages on. Now, as was then, once the fiscal stimulus has been delivered, inflation has started to dominate discussions once again.

But is there only one possibility, just inflation, or does its alter-ego, deflation, get to dominate media headlines this time around?

Anyone can see the reasons for inflation, given the enormous largesse being doled out. However, inflation, which has recently been below the central bank targets, fell further during the lockdown. Even with the fiscal stimulus provided by central banks, the barriers posed by social distancing to shopping and increased precautionary saving has led to falling prices – evident from the falls in inflation in the developed economies.

Along with lower oil prices, lack of demand may quite possibly lead to companies discounting prices to reduce inventory and generate cash for their running costs. While this may not be the case for essential goods, the prospect of cheaper prices of non-essential purchases may prevent immediate expenditure by consumers.

Also, during this period, numerous companies have been looking into methods of increasing productivity and growth through the implementation of technology and digital transformation. If this continues apace, there is a possibility that growth in our economies takes on a different dimension and requires us to rethink our theories.

To quote from American-based Professor Yossi Sheffi’s Anna Karenina principle – every economic crisis comes with its own ‘roster of causes, cascade of effects and its own litany of misery’.[/vc_column_text][/vc_column][/vc_row][vc_row type=”full_width_background” full_screen_row_position=”middle” column_margin=”default” equal_height=”yes” content_placement=”middle” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” bg_color=”#ffffff” scene_position=”center” top_padding=”80″ bottom_padding=”80″ text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/2″ tablet_width_inherit=”default” tablet_text_alignment=”center” phone_text_alignment=”center” column_border_width=”none” column_border_style=”solid” bg_image_animation=”none”][vc_custom_heading text=”Want to see what Dynamic Planner can do for you?” font_container=”tag:h2|font_size:36|text_align:left|color:%23000000|line_height:44px” use_theme_fonts=”yes”][vc_column_text css=”.vc_custom_1534103308164{margin-top: 15px !important;}”]Schedule a free no-obligation demo with a business consultant and experience the full functionality of Dynamic Planner.[/vc_column_text][/vc_column][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/2″ tablet_width_inherit=”default” tablet_text_alignment=”center” phone_text_alignment=”center” column_border_width=”none” column_border_style=”solid” bg_image_animation=”none”][vc_row_inner column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” text_align=”right”][vc_column_inner column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” column_border_width=”none” column_border_style=”solid” bg_image_animation=”none”][nectar_btn size=”large” button_style=”regular” button_color_2=”Accent-Color” icon_family=”default_arrow” url=”https://www.dynamicplanner.com/demo/” text=”Request Demo” margin_top=”20″][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row]

During this life in lockdown, I have found myself doing a lot of things I always thought of but didn’t get to until now – writes Andrew Morris, Product Specialist at Canada Life Investments. Recently, for example, I listened to Stephen Fry’s books, Mythos and Heroes, on audible whilst attempting to do yet another amateur DIY project.

I was amused by the old tale of Icarus and his father Daedalus, who were imprisoned on the island of Crete. Daedalus, a clever craftsman, built two sets of wings to help him and his son, Icarus, escape the castle.

He warned Icarus not to fly too low to the sea, otherwise the spray would soak the feathers and weigh him down, but also not too high near the sun or else the wax holding the feathers would melt and cause him to fall to his death.

As with most Greek myths, this one did not end well. Icarus, being young and daring, flew everywhere. He got too close to the water as well as too high in the sky where, inevitably, he fell to his death. There are several lessons from this story, but the one that made me relate to what’s going on in the world right now given the covid-19 crisis is how Icarus caused his own demise. Amidst the exhilaration of it all, he ignored the signs and continued to fly high for the joy of the flight. Consequently, his fall was much farther, so far that it took everything away.

We have seen returns rise in many asset classes over the past ten years. The mixed investment sector, for example, continues to record higher than average annual returns every decade, despite repeated expectations of future corrections. This flight for matching and beating returns has caused many portfolios to fly higher and higher to reap these rewards. Then the most extraordinary volatility in history hit the markets and over the past three months’ returns have gone the other way. The effect was quicker and further, as if our wings had just been clipped. Indeed, for those funds like Icarus, the fall has been hard hitting.

Daedalus, who followed his own advice, did not enjoy the flight as much as Icarus, however, he also did not have the same fate. The moral of this story is that while a rules-based approach may seem unfulfilling, especially when markets make big gains, it too is safe when volatility suddenly increases. It’s only in hindsight when the falls happen that we see how wise it would have been to follow the rules of Daedalus.

Daedalus approach to investing

At Canada Life Investments, our managers follow a strict process with built-in flexibility across our multi-asset fund range. Our Portfolio Funds, for example, always stay aligned to each risk profile. This may seem boring at certain points in the cycle, but we aim to minimise the fall without having to make rash decisions on the assets we hold.

The benefit of this conservative style is reflected in our results during Q1 2020 within our Portfolio Funds: compared to other risk mapped funds, our fall has been lower and softer whilst still mirroring the investors’ tolerance to risk. Furthermore, we still have managed to provide outperformance in funds over the longer term. It may not seem like a joy ride during market surges, but unlike Icarus we were able to control our fate and weather the market seesaws we saw in March.

Source: Morningstar as at 31/03/2020, bid to bid with income reinvested. DT fund list is an equally weighted composite benchmark of every multi asset OEIC/Unit Trust fund which has been either risk profile or risk targeted by Dynamic Planner as at the 31/03/20. DT Active funds are a subset of the DT Funds which have been labelled as either active or blended. RTM funds are a subset of the DT Fund list of only funds which are risk targeted by Dynamic planner. The funds to be included in each category decided by research by Canada Life Investments. Green highlights LF Canlife Portfolio funds have outperformed the DT funds over the time period shown.

Within our Portfolio Fund range, our III and IV funds were in the top quartile of their peer groups and two others in the second quartile for the three months ending the 31st of March 2020. This is due to sensible asset allocation and the performance of the underlying equity and fixed income funds.

In terms of our positioning, within our Portfolio Funds we have continued to match our strategic asset allocation, with adjustments to the underlying investments. As with Daedalus, we are adjusting to the wind to keep the funds on track without making any large bets or, as Icarus did, attempts to overcompensate due to an earlier fall in returns. A prime example is our focus on tech within our US equity holdings. We held a higher conviction to the Nasdaq even before covid-19 struck and believe it will continue to outperform throughout the crisis and in the new norm.

For us, risk management is a function of relative weights, relative performance, liquidity and volatility of the underlying fund components, with constant observation of realised returns in both absolute terms and versus similar peer funds. A simple but safer way to invest in turbulent times.

Not only have we shown a lower drawdown during the market falls, but, from the lowest point in the market on 23 March – 30 April we also have been able to maintain the upside compared to the sector whilst continuously maintaining our Daedalus approach to investing.

Source: Table 1: Morningstar as at 30/04/2020, bid to bid with income invested. Table 2: Morningstar as at the 30/04/2020 for cumulative returns, as at 31/03/2020 for discrete performance. DT fund list is an equally weighted composite benchmark of every multi asset OEIC/Unit Trust fund which has been either risk profile or risk targeted by Dynamic Planner as at the 31/03/20. DT Active funds are a subset of the DT Funds which have been labelled as either active or blended. RTM funds are a subset of the DT Fund list of only funds which are risk targeted by Dynamic planner. The funds to be included in each category decided by research by Canada Life Investments.

Important information

Past performance is not a guide to future performance. The value of investments may fall as well as rise and investors may not get back the amount invested. Income from investments may fluctuate. Currency fluctuations can also affect performance.

The information contained in this document is provided for use by investment professionals and is not for onward distribution to, or to be relied upon by, retail investors. No guarantee, warranty or representation (express or implied) is given as to the document’s accuracy or completeness. The views expressed in this document are those of the fund manager at the time of publication and should not be taken as advice, a forecast or a recommendation to buy or sell securities. These views are subject to change at any time without notice. This document is issued for information only by Canada Life Investments. This document does not constitute a direct offer to anyone, or a solicitation by anyone, to subscribe for shares or buy units in fund(s). Subscription for shares and buying units in the fund(s) must only be made on the basis of the latest Prospectus and the Key Investor Information Document (KIID) available at www.canadalifeinvestments.com.

Data Source – © 2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Canada Life Investments is the brand for investment management activities undertaken by Canada Life Asset Management Limited, Canada Life Limited and Canada Life European Real Estate Limited. Canada Life Asset Management Limited (no. 03846821), Canada Life Limited (no.00973271) and Canada Life European Real Estate Limited (no. 03846823) are all registered in England and the registered office for all three entities is Canada Life Place, Potters Bar, Hertfordshire EN6 5BA. Canada Life Asset Management is authorised and regulated by the Financial Conduct Authority. Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

CLI01622 Expiry 31/05/2021